How to reduce the risk of wrongful termination claims
In an at-will employment relationship either the employer or the employee can end the relationship at any time – doing so without notice and for any reason – or no reason – as long as the reason is not unlawful. So you may find yourself wondering “Do I need to provide a reason when I fire an “at-will” employee?” Practically speaking, the answer is “yes,” and here’s why:
1. Failing to give a reason creates high legal risk. If a former employee claims wrongful termination, “I don’t need a reason” won’t be a compelling or sympathetic defense. In fact, in the absence of a reason, the chances of having to defend your actions increases because without a stated reason, the employee is left to speculate. If the employee then alleges some form of discrimination or retaliation, you’ll be required to prove that your actions were based on a legitimate and non-discriminatory reason. If your defense to a claim is the first time you provide a reason, your reason will be subject to skepticism and challenge, increasing the chances that the employee’s case will get to a jury. Typically, jurors want to know that an employer acted fairly. If you fire an employee without providing an explanation, it will be too easy for a jury to conclude that the real motivation for the discharge was improper. These risks are substantially reduced if you simply provide a reason at the time of discharge.
Another risk is that the employment relationship might not really have been at-will. The concept of at-will employment is well known. What is less well known is that the numerous exceptions to the rule are so vast that the exceptions swallow the rule. It is rare to find an employment relationship that is purely at-will. If the relationship is not purely at-will, then the assumption that you don’t even need a reason is invalid.
When you provide a reason, not only will you reduce the risk of unnecessary litigation, you’ll likely improve long-term employee relations.
2. Providing a reason is a human resources best practice. Legal risks aside, providing a reason is simply a best practice. An important goal of effective HR practices is to create a sense of consistency and fairness in the workplace. This fosters strong employee morale and, in turn, productivity. A basic principle of good HR is that employees should not be surprised by any form of discipline. It follows, then, that even if an employee deserves to be discharged, he also deserves to know why. Ultimately, your ability to attract and retain strong talent is eroded if you develop a reputation for seemingly arbitrary (or unexplained) employment actions.
Eric Jones represents employers in all types of labor and employment disputes (lawsuits, arbitrations and enforcement agency proceedings). From defending wrongful termination claims to resolving union grievances and labor disputes, Eric develops effective litigation strategies based on client objectives and then manages the dispute to successful resolution.